NEW YORK, NEW YORK and WASHINGTON, DC - June 30, 2016 - Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), said that the seventh pro rata interim distribution from the Customer Fund to eligible BLMIS customers commenced today, Thursday, June 30, 2016.
The SIPA Trustee is distributing approximately $190.247 million on a pro rata basis to BLMIS account holders with allowed claims, bringing the aggregate amount distributed to eligible claimants to approximately $9.47 billion, which includes approximately $836.6 million in committed advances from the Securities Investor Protection Corporation (SIPC). The seventh distribution represents 1.305 percent of each claim dollar and will be paid on claims relating to 972 BLMIS accounts to record holders of allowed claims as of June 15, 2016. When combined with the prior six distributions, in aggregate, at least 58.369 percent of each customer’s allowed claim amount will be paid, unless that claim has been fully satisfied.
“I remain optimistic that the Trustee and his team, together with SIPC, will achieve additional milestone distributions like the one announced today,” said SIPC President and CEO Stephen P. Harbeck. “SIPC’s support of the liquidation continues, with our shared goal of maximizing the return of stolen funds to eligible victims as quickly as possible.”
“I’d also like to underscore the fact that all administrative costs of the Madoff Recovery Initiative are funded by SIPC, meaning that 100 percent of recoveries are returned to the legitimate owners and none of the costs to right the wrongs done by Madoff are borne by his victims.”
The seventh interim pro rata distribution was reached as a result of the successful negotiations of the SIPA Trustee and his legal teams – led by his Chief Counsel, David J. Sheehan – over the six months between November 2015 and May 2016 with a number of parties including Vizcaya Partners Limited, entities of Bank J. Safra, Asphalia Fund, Ltd., Zeus Partners Limited, Pictet et Cie, and entities related to Thybo Asset Management Ltd.
The average payment for an allowed claim issued in the seventh distribution will total $195,727.68. The smallest payment totals $136.69 and the largest payment is $31,942,323.51. In addition, SIPC will be reimbursed for its advances to accounts that the seventh interim distribution has fully satisfied.
Currently, the SIPA Trustee has allowed 2,597 claims related to 2,249 BLMIS accounts. Of these, 1,296 accounts will now be fully satisfied following the seventh interim distribution. All allowed claims totaling $1,200,024.90 or less will be fully satisfied after the distribution.
To date, the SIPA Trustee has recovered or reached agreements to recover approximately $11.168 billion since his appointment in December 2008. These recoveries exceed similar efforts related to prior Ponzi scheme recoveries, in terms of dollar value and percentage of stolen funds recovered.
Ultimately, 100 percent of the SIPA Trustee’s recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims.
Prior distributions as of June 30, 2016 are as follows:
- The first pro rata interim distribution, which commenced on October 5, 2011, has distributed approximately $685.3 million, representing 4.602 percent of the allowed claim amount of each individual account, unless the claim is fully satisfied.
- The second pro rata interim distribution, which commenced on September 19, 2012, has distributed approximately $4.978 billion, representing 33.556 percent of the allowed claim amount of each individual account, unless the claim is fully satisfied.
- The third pro rata interim distribution, which commenced on March 29, 2013, has distributed approximately $696.3 million, representing 4.721 percent of the allowed claim amount of each individual account, unless the claim is fully satisfied.
- The fourth pro rata interim distribution, which commenced on May 5, 2014, has distributed approximately $468.2 million, representing 3.180 percent of each individual account, unless the claim is fully satisfied.
- The fifth pro rata interim distribution, which commenced on February 6, 2015, has distributed approximately $403.4 million, representing 2.743 percent of each individual account, unless the claim is fully satisfied.
- The sixth pro rata interim distribution, which commenced on December 4, 2015, has distributed approximately $1.209 billion, representing 8.262 percent of each individual account, unless the claim is fully satisfied.
There are 71 deemed determined claims still subject to litigation. Once litigation is resolved or settlements reached, these claims may be allowed. Any allowed claim would become eligible for all pro rata distributions to date and could add billions of dollars to the total value of allowed claims, currently $15.08 billion. For this potential scenario, the SIPA Trustee has to date reserved approximately $1.934 billion.
More information on overall recoveries to date and the ongoing liquidation can be found on the SIPA Trustee’s website: www.madofftrustee.com.
Messrs. Harbeck and Picard would like to thank the SIPA Trustee’s Chief Counsel David Sheehan and BakerHostetler attorneys Seanna Brown and Heather Wlodek, who worked on the seventh pro rata interim distribution and its related filings, as well as BakerHostetler, Windels Marx, and all of the attorneys and professionals whose work has led to the distribution. They thank Vineet Sehgal and his colleagues at AlixPartners, as well as Josephine Wang, Kevin Bell and their colleagues at SIPC, for their ongoing work and participation in the Madoff Recovery Initiative distributions.